Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
USA Today – Given the stock market’s wretched performance this year, your current retirement plan may involve a modest part-time job, such as woodworking or forgery.
Before you take up a life of crime, however, remember that really rotten markets sometimes uncover opportunities. In fact, the worse the market, the more bargains you can find. And right now, you can buy stocks and bonds of the nation’s best-run and most profitable businesses at astoundingly low prices. What’s more, you can collect dividends and interest while you wait for the economy to recover and for other investors to regain their senses.
First, and let’s not whitewash things here, the current market has all the appeal of a weekend in the local viper pit. The Dow Jones industrial average plunged 679 points on Thursday alone; it has shed 5,585 points, or 39%, in the past 12 months.
Telegraph.co.uk – A move by US and European central banks, as well as by central banks in China, Taiwan, Hong Kong, Australia and South Korea, to slash borrowing costs has failed to reassure investors.
"It’s impossible to predict the bottom, and technical analysis is meaningless as panic and fear overwhelm the markets," said Jang Huh, at Prudential Asset Management in Seoul.
Japan’s Nikkei stock index fell 10pc, the biggest loss since “Black Monday” in October 1987 and it third biggest loss ever. The index, which closed down 881.06 points at 8,276.43, has lost more than 24pc over the past week.
Prime Minister Taro Aso warned that the slump could have real effects on Asia’s largest economy. The share price fall “has reached a point where it affects the real economy and fund raising,” he told reporters.
All indications are that European markets will open sharply lower.
CNBC – The Wall Street fallout is having aftershocks throughout the economy, but believe it or not, the entertainment industry is having no problem securing bank-financed credit.
Sure, it’s not boom time, but the fact that media companies are able to attract financing is impressive, and a testament to the fact that movie going is generally counter-cyclical.
On Friday the government was frantically putting together a bailout plan for the financial markets, while production houses attracted more investment. Last week Steven Spielberg secured $700 million in credit through JP Morgan to back his new production company in partnership with India’s Reliance Big Entertainment, from which he’s getting $500 million in equity.
Hartford Courant – Michael Lauer’s estate in the prestigious backcountry neighborhood of this wealthy town looks almost as troubled as the U.S. economy.
The grounds are overgrown with waist-high weeds. A pool cover is filled with filthy, stagnant water. Inside, paint is peeling around the soaring windows.
So when the house of the disgraced hedge fund manager goes up for foreclosure auction today by the Internal Revenue Service, bidders will have to look for its potential — and think about how much they will have to invest to make the 7,300-square-foot contemporary livable again.
Just like taxpayers and business managers eyeing the U.S. economy.
Washington Post – Given the panic in Washington over the financial markets, it is virtually certain that Congress will soon pass some form of the bailout plan the Treasury put forward last week. This is not an ideal proposal, particularly since it does not address the underlying problem with mortgages and negative housing equity.
No troubled mortgage holders would benefit directly, and key commercial banks might still end up undercapitalized.
However, no legislator wants to risk allowing the economy to collapse on his or her watch, and, according to Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, that is what’s at stake.
TMCnet – Several months ago, economist David Hale had a private meeting with Federal Reserve Chairman Ben Bernanke, who was trying to ward off a recession by lowering interest rates and increasing the money supply in the economy.
The problem with that approach is that the value of the dollar plunged against foreign currencies, causing crude oil prices to skyrocket because oil is pegged to the dollar. It affected food prices, gasoline and family budgets.
"Ben, you are playing a very unique role in world economic history," Hale recalled telling Bernanke, an expert in the Great Depression. "You are the first central bank governor of the United States to preside over a recession with no decline in commodity prices."
Seeking Alpha – Some analysts say a big-picture trend presently unfolding involves hedge funds and other players unwinding bets on commodities/foreign currencies and plowing the proceeds into U.S. financial and other stocks. They are doing this for valuation reasons and as a haven against weakening economies overseas.
There is some evidence that it at least partly reflects hedge funds scrambling to raise cash to meet redemption requests. Financial stocks have risen for sure, but that likely reflects hedge funds buying back short positions to generate cash, not to go long because they think the fundamentals are turning.
I remain somewhat skeptical of the thesis that the U.S. economy is close to coming out of the downturn, and so the places to shift into are U.S. stocks and the U.S. dollar. When one looks at the problems the U.S. has, especially in its financial sector, they would seem to have the potential to inflict more pain on the economy than we have seen to date.
Forbes – Russia’s government and central bank must act to lure additional funds into its financial market, President Dmitry Medvedev said on Thursday.
"The government and central bank should undertake all necessary measures to ensure inflows of additional funds into the financial market," Medvedev told reporters ahead of a meeting of government officials on financial markets.
"The situation on the Russian market today does not reflect the real state of the economy," he said. "Russian remains an attractive place for financial investments."
Russia’s stocks fell more than 5 percent on Wednesday to a fresh two-year low as poor performance prompted redemptions from hedge funds ahead of results, while falling oil prices weighed on future prospects.
The sell-off has seen the benchmark RTS index shed nearly half of its value since mid-March.
MSN MoneyCentral – Paulson & Co, a prominent New York hedge fund, will weigh buying shares or convertible bonds in banks and other financial institutions that need capital, the Financial Times reported on its website on Sunday.
John Paulson, its founder, remained bearish on the economy and the financial sector, but would consider taking positions in the sector as prices fall to his target levels, the paper reported, citing two unnamed investors who were on a Paulson conference call for clients last week.
Paulson is to launch its Recovery fund on October 1, the paper said.
Reuters UK – DEGI, a fund management unit of Aberdeen Property Investors, has bought one of Warsaw’s biggest business parks for 167 million euros (135 million pounds) in a bid to boost its exposure to Poland’s fast-growing economy.
The 43,700 square metre Marynarska Business Park was bought from developer Ghelamco on behalf of investors in DEGI’s open-ended international property mutual fund.
The newly built property is 99 percent let to Polish and international tenants specialising in the services sector, DEGI said in a statement. Yield details were not disclosed.
The Independant – Susan Solovay, founder of a New York-based fund of hedge funds, explains to Martin Baker why her strategy of investing only with female managers will pay off – and why Warren Buffett is in fact a woman trapped in a man’s body.
Susan Solovay is every inch the modern female executive in the revved-up engine room of New York finance. She breezes into a noisy, trendy restaurant in midtown Manhattan, and a number of things are pretty much immediately apparent: she is super-smart, pencil-slim with dark hair, deceptively youthful (she’s in her late 40s), fast-talking, full of energy, successful – and late.
Over the din, Solovay apologises profusely. The markets may be going through a dodgy period, and the US economy teetering on the edge of recession, but the founder of Pomegranate Capital, a fund of hedge funds that invests exclusively with women hedge fund managers, is still moving at top speed and cramming ever more into a working day. By the time we meet, all the little overruns have put her behind schedule, and she’s very sorry.
Forbes – The dollar edged up towards a one-month high against the euro on Friday before monthly U.S. jobs data later in the day, with investors viewing the report as a key hurdle for whether the U.S. currency can sustain its rebound.
A mixed bag of U.S. data released the previous day showing the economy expanding less than expected in the second quarter, a spike in jobless claims but a pick-up in Midwest business activity did not prove decisive for the dollar. [ID:nN31399964]
Investors are still looking for the Federal Reserve to raise interest rates later in the year, just as mounting signs of economic slowdown from the euro zone to Australia have started to take a toll on other major currencies.
